RBI Issues Second Amendment Directions 2026: Enhanced Disclosure Requirements for Urban Co-operative Banks on Unsecured Advances and Nominal Member Lending

Overview of the Amendment

The Reserve Bank of India has rolled out a fresh set of regulatory directions aimed at strengthening the transparency framework governing Urban Co-operative Banks (UCBs) across the country. Through the Reserve Bank of India (Urban Co-operative Banks – Financial Statements: Presentation and Disclosures) Second Amendment Directions, 2026, the central bank has introduced a structured disclosure mechanism that UCBs must incorporate within their financial statements, specifically within the notes to accounts.

Issued vide circular RBI/2026-27/41 DOR.CRE.REC.31/21-04-018/2026-27 dated April 29, 2026, and signed by the Chief General Manager, this amendment builds upon the existing directions framework and is directly linked to updates in concentration risk management norms applicable to UCBs. The new disclosure requirements will come into effect from October 1, 2026, giving institutions a transition window to align their reporting systems accordingly.

The amendment has been issued in exercise of powers vested under sections 21 and 35A read with Section 56 of the Banking Regulation Act, 1949, along with all other applicable enabling provisions under law. The Reserve Bank of India, being satisfied that such measures are necessary and expedient in the public interest, has formally notified these changes.

This amendment modifies the Reserve Bank of India (Urban Co-operative Banks – Financial Statements: Presentation and Disclosures) Directions, 2025 (referred to hereinafter as "the Directions") and is consequent to the issuance of the Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) – Amendment Directions, 2026.

Key Legal Anchor: The amendment is rooted in concentration risk management reforms, signalling the RBI's intent to have a granular view of unsecured credit exposure and lending patterns within the co-operative banking sector.

What Has Changed: The Core Amendment

Insertion of a New Sub-Sub Paragraph in Chapter III

The amendment inserts a new clause — sub-sub paragraph (ix) — under sub-paragraph 10(5) on Exposures within Chapter-III: Disclosure in Financial Statements – Notes to Accounts of the existing Directions.

This new clause is titled:

10(5)(ix) — Unsecured Advances and Lending to Nominal Members

Under this provision, UCBs are now mandated to disclose detailed data pertaining to:

  1. Aggregate unsecured advances — both sanctioned during the year and outstanding at year-end
  2. Lending extended to nominal members, as defined under the Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) Directions, 2025